IoT Projects Increasingly Target Revenue Growth

J. Marcus

Summary Bullets:

• Most IoT projects to date have focused on increasing efficiency or reducing costs

• In 2018, IoT deployments are increasingly intended to generate new revenues as well

IoT offers operators and enterprises a slew of opportunities, with the rise of pervasive connectivity opening up new ways to both collect and generate data in pursuit of stronger businesses and a better experience for customers. The GlobalData IoT Innovations Tracker is following new deployments across sectors worldwide, capturing the key use cases and technology choices made by the deploying organizations. But it also considers the key questions for each deployment: Why are we doing this? What do we hope to gain from this IoT project?

There are dozens of use cases for IoT, but each deployment tends to focus on a fundamental business issue(s). For example, by monitoring connected business machines (anything from building elevators to farm equipment), operational data is used to increase efficiency. Indeed, 60% of deployments in 2017 sought to increase efficiency through IoT, and that number has held fairly steady to date on 2018. Another key operational driver – cost reduction – is also behind new deployments, although its importance has lessened somewhat this year (41%) compared to last (50%). Could it be that IoT is gaining momentum as a source or new driver of increased revenue?


Source: GlobalData IoT Innovations Tracker, November 2018

It certainly looks that way, although it is a little too soon to declare a major shift in the main reasons why IoT projects are undertaken. The IoT Innovations Tracker doesn’t include every deployment of IoT in the market, but it is comprehensive enough to reveal trends. In 2018, a noticeable increase in projects intended to generate new revenue from new and existing products/services can be seen compared to 2017, when the focus was firmly on operations and data insights. (In 2018, 22% of deploying organizations hope IoT will increase their sales, compared to 6% last year.)

To be sure, the intended benefits of IoT deployments are not mutually exclusive, and many projects seek multiple benefits. In fact, one can enable another. Increasing energy efficiency to attract more tenants in an office building, for example, ticks the boxes for cost, efficiency, and increased revenue. Using IoT for purely operational reasons or to generate insights for decision making (another intended benefit which has been consistent from 2017 to 2018) will undoubtedly continue to drive deployments. But current figures suggest IoT technology will be used more and more by the commercial side of operators and businesses, to sell more existing products and services and to launch new ones.

 

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